Improved Controls Needed Over Waivers of the Armed Services Exchange Regulations

NSIAD-85-72: Published: May 13, 1985. Publicly Released: May 13, 1985.

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In response to a congressional request, GAO determined whether the post exchange at Mountain Home Air Force Base, Idaho, is selling major home appliances contrary to the intent of law and applicable federal regulations.

GAO found that the post exchange is acting within its authority under existing military regulations because it is considered isolated with respect to the availability of these products and is entitled to a waiver of post exchange regulations. However, since there are now six retailers of home appliances within 11 miles of the base, the classification of the base as isolated is questionable. GAO found that post exchange regulations do not provide sufficient guidance on how to determine what constitutes adequate availability of commercial facilities. Furthermore, federal regulations do not require the submission of current data to support the annual revalidations of the initial waiver request. Finally, GAO found that the regulations do not require periodic audits of the initial waiver and subsequent revalidation processes.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: The Army and Air Force revised A.R. 60-20 and A.F.R. 147-14 on June 2, 1986 to incorporate GAO recommendations.

    Recommendation: The Secretary of Defense should direct the Secretaries of the Army and Air Force to amend their joint exchange regulations.

    Agency Affected: Department of Defense

  2. Status: Closed - Implemented

    Comments: The Air Force revised A.F.R. 147-14 on June 2, 1986.

    Recommendation: The Air Force and the Army should amend the Army and Air Force Exchange Service Operating Policies to provide more specific guidance for determining the availability of commercial shopping facilities and evaluating their adequacy.

    Agency Affected: Department of Defense: Department of the Air Force

  3. Status: Closed - Implemented

    Comments: The Army revised A.R. 60-20 on June 2, 1986.

    Recommendation: The Air Force and the Army should amend the Army and Air Force Exchange Service Operating Policies to provide more specific guidance for determining the availability of commercial shopping facilities and evaluating their adequacy.

    Agency Affected: Department of Defense: Department of the Army

  4. Status: Closed - Implemented

    Comments: The Air Force revised A.F.R. 147-14 on June 2, 1986.

    Recommendation: The Army and the Air Force should amend the Army and Air Force Exchange Service Operating Policies to require that sufficient updated information is provided with a revalidation request so that changes in circumstances can be fully evaluated.

    Agency Affected: Department of Defense: Department of the Air Force

  5. Status: Closed - Implemented

    Comments: The Army revised A.R. 60-20 on June 2, 1986.

    Recommendation: The Army and the Air Force should amend the Army and Air Force Exchange Service Operating Policies to require that sufficient updated information is provided with a revalidation request so that changes in circumstances can be fully evaluated.

    Agency Affected: Department of Defense: Department of the Army

  6. Status: Closed - Not Implemented

    Comments: As discussed with DOD officials, other higher priority audit work on exchanges requires use of limited audit resources. Given the current circumstances, GAO agreed and dropped this recommendation.

    Recommendation: The Army and the Air Force should consider amending the Army and Air Force Exchange Service General Policies to require periodic audits of the initial Armed Services Exchange Regulations waiver and revalidation processes by the appropriate service audit organization.

    Agency Affected: Department of Defense: Department of the Air Force

  7. Status: Closed - Not Implemented

    Comments: As discussed with DOD officials, other higher priority audit work on exchanges requires use of limited audit resources. Given the current circumstances, GAO agreed and dropped this recommendation.

    Recommendation: The Army and the Air Force should consider amending the Army and Air Force Exchange Service General Policies to require periodic audits of the initial Armed Services Exchange Regulations waiver and revalidation processes by the appropriate service audit organization.

    Agency Affected: Department of Defense: Department of the Army

  8. Status: Closed - Implemented

    Comments: The Air Force reviewed the 1985 waiver and dropped several items. GAO considers this responsive.

    Recommendation: The Secretary of the Air Force should closely review the 1985 revalidation of the Armed Services Exchange Regulations waiver authorizing the base exchange at Mountain Home Air Force Base to continue to sell major home appliances.

    Agency Affected: Department of Defense: Department of the Air Force

 

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